____________________________________________________________________________________________________________

638 Independence Parkway, Suite 100, Chesapeake, VA 23320 | P: 800-782-3452 | F: 866-466-2776 | www.narpm.org

May 23, 2008 Edward B. Lattner Chief Division of Human Resources & Appeals Montgomery County Attorney's Office 101 Monroe Street Rockville, Maryland 20850 By: facsimile to (240) 777-6705 By: e-mail to Edward.Lattner@montgomerycountymd.gov By: U.S. Postal Service regular mail Re: U.S. Supreme Court 07-1373 Amicus Brief in Support of the Petition for Writ of Certiorari Glenmont Hills Associates Privacy World at Glenmont Metro Center v. Montgomery County, Maryland Dear Mr. Lattner, As the Government Affairs Co-Chair ‘s of the National Association of Residential Property Managers (NARPM) and pursuant to Supreme Court Rule 37, please find this letter as notification that NARPM intends to file an amicus curiae brief in support of the petition for writ of certiorari. As delineated under the Rule, we are seeking your consent to such filing. Please notify us in writing as soon as possible as to whether the County will be consenting to our amicus filing. We can be reached at the contact information on this letterhead. Thank you for your time and consideration. Steven Stein John Parker

NO.

_________________________________________________

IN THE

SUPREME COURT OF THE UNITED STATES __________________

GLENMONT HILLS ASSOCIATES

PRIVACY WORLD AT GLENMONT METRO CENTER,

Petitioner, v.

MONTGOMERY COUNTY, MARYLAND,

Respondent. ______________________

On Petition For A Writ Of Certiorari

To The Supreme Court Of The United States

_______________________

BRIEF OF AMICUS CURIAE IN SUPPORT OF PETITIONER‟S

PETITION FOR WRIT OF CERTIORARI _______________________

Leslie Robert Stellman

Counsel of Record Shani Kamaria Whisonant

HODES, PESSIN &

KATZ, P.A.

901 Dulaney Valley Road,

Suite 400

Towson, Maryland 21204

(410) 938-8800

Counsel for Amicus Curiae

June 2, 2008

i

TABLE OF CONTENTS

Page

INTEREST OF AMICUS CURIAE .......................... 1

SUMMARY OF ARGUMENT .................................. 3

OPINION BELOW ................................................... 4

ARGUMENT............................................................. 5

CONCLUSION ...................................................... 22

ii

CASES

Page(s)

Davis v. Department of Revenue of Kentucky,

___ S.Ct. ___, 2008 WL 2078187 (2008) .......... 12

Geier v. American Honda Motor Co., Inc., 529 U.S. 861, 120 S.Ct. 1913 (2000) .............. 5, 7

Knapp v. Eagle Property Management Corp., 54 F.3d. 1272 (7th Cir. 1995) .............................. 9

Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 125 S.Ct. 2074 (2005) ........ passim

Montgomery County v. Glenmont Hills Associates Privacy World at Glenmont Metro Center,

402 Md. 250, 936 A.2d 325 (2007) ........... passim

Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S.Ct. 2646

(1978) ................................................................ 13

Pennsylvania Coal Co. v. Mahon,

260 U.S. 393, 43 S.Ct. 158 (1922) .................... 14

United States v. Pewee Coal Co., 341 U.S. 114, 71 S.Ct. 670 (1951 ..................... 14

CONSTITUTIONAL PROVISIONS

United States Constitution, Amend. 5 ....... passim United States Constitution, Article I, Cl. 2 ........ 10

iii

STATUTES

42 U.S.C. § 1437 .......................................... passim 42 U.S.C. § 1437f ................................................... 6

42 U.S.C. §1439 ................................................... 14

P.L. 93-383 ............................................................. 4

STATE STATUTES

Montgomery County Code Chapter 27, Article I, §

27-6 ............................................................. 15, 16

Montgomery County Code Chapter 27, Article I, §

27-12 ................................................................. 14

REGULATIONS

24 C.F.R. §982.l01 ............................................... 14

24 C.F.R. § 982.305 .............................................. 16

24 C.F.R. § 982.401 .................................. 16, 17, 20

24 C.F.R. § 982.454 .............................................. 14

24 C.F.R. § 982.506 .............................................. 10

24 C.F.R. § 982.507 .............................................. 10

iv

OTHER AUTHORITIES

Brief of Amici Curiae Maryland Disability Law

Center, et al. to Maryland Court of Appeals ... 10

HUD VOUCHER PROGRAM GUIDEBOOK:

http://www.hud.gov/offices/pih/programs/hcv/for

ms/guidebook.cfm ........................................... 4, 9

National Association of Residential Property

Managers: http://www.narpm.org ................ 1, 2

Petition for Writ of Certiorari ............................... 5

Renters Can‟t Escape Housing Foreclosure Crisis:” http://www.usatoday.com/money/economy/housin

g/2008-4-21-rent-rising-eviction_N.htm .......... 21

Writ of Certiorari, Appendix A ........................... 13

Writ of Certiorari, Appendix G ......................... 4, 8

Writ of Certiorari, Appendix K. ............................ 8

1

INTEREST OF AMICUS CURIAE1

Founded in October 1998, the National Association

of Residential Property Managers (“NARPM” or the

“Association”) is a trade association of real estate

professionals who oversee and manage mostly small

non-owner occupied rental properties.2 With 2,300

members, NARPM serves the residential property

management industry. NARPM is the premier

professional association for residential property

managers; these include real estate agents, brokers,

managers and their employees. The NARPM Code of

Ethics mandates that members strive to promote,

support, and comply with applicable Federal, State,

and local fair housing laws.3 Thus, within the

organization, NARPM has expressed a strong

1 Petitioners have consented to the filing of this brief.

Respondents have withheld consent to file this brief.

Counsel of record for all parties received notice at least 10

days prior to the due date of the amicus curiae‟s intention to

file this brief. No counsel for a party authored this brief in

whole or in part, and no counsel of party made a monetary

contribution intended to fund the preparation or submission

of this brief. No person other than amicus curiae, its

members, or its counsel made a monetary contribution to its

preparation or submission. 2 Indeed, many NARPM members or their management

clients (hereafter collective referred to as “NARPM

members”) manage properties with fewer than five units. A

substantial number of NARPM members manage single-

family dwellings. 3 The NARPM Code of Ethics outlines the high level of ethics

to which members must adhere. Source:

http://wwww.narpm.org/about/code-of-ethics.html (last

visited May 30, 2008).

2

commitment to ensuring that property managers and

landlords provide quality rental property to the

public. An ethics complaint link, available to the

public on the NARPM website, further demonstrates

the depth of NARPM‟s commitment to promoting the

highest ethical standards among its members. The

Association also advocates for the interests of its

members in setting public policy, including tax laws,

other relevant legislation, legal document

requirements, accounting practices, insurance,

building codes, zoning, and utilities.4

NARPM recognizes that prospective tenants

should be treated equally and without discrimination;

the Association‟s internal controls demonstrate this

commitment. However, NARPM is at the same time

particularly concerned that compelling small property

owners to comply with the extensive requirements of

the Federal Housing Choice Vouchers Program

(“HCVP”) would require strict compliance with a

number of federal laws. This is an undertaking that a

substantial number of NARPM members have chosen

to forego for a number of legitimate reasons. Thus,

while NARPM is committed to non-discriminatory

rental practices, its members believe that no state or

locality should, through the artifice of anti-

discrimination legislation, force its members to

participate in a purely voluntary federal program that

is unsuitable for most small landlords.

4 Source: http://www.narpm.org/about/index.html (last

visited May 28, 2008).

3

SUMMARY OF ARGUMENT

1. A local government cannot, through the

enactment of a law prohibiting discrimination against

prospective tenants based upon “source of income,”

compel landlords to participate in the purely

voluntary Federal Housing Choice Vouchers Program

(“HCVP”) without running afoul of the stated public

policy and statutory purpose of the federal law.

2. The Maryland Court of Appeals‟

characterization of the mandatory requirement that

landlords participate in a purely voluntary federal

program as neither “amending, or conflicting with

federal law in any material sense,” was

fundamentally flawed, thereby compelling review by

this Court in order to determine whether the local

ordinance is in direct conflict with the federal law and

thus preempted.

3. By compelling landlords to participate in a

purely voluntary federal program, the Montgomery

County government has engaged in an

unconstitutional “taking” as defined by the Fifth and

Fourteenth Amendments; the statute eliminates

landlords‟ freedom to rent their property free of the

federal regulations and requirements outlined in the

Housing Choice Voucher Program.

4. The Montgomery County “source of income”

anti-discrimination legislation, versions of which have

been replicated in other states and localities, will

contract the amount of available, affordable housing

to low income tenants to Montgomery County

residents; this conflicts directly with the stated

purpose of federal housing laws.

4

OPINION BELOW

On November 30, 2007, the Maryland Court of

Appeals issued an opinion in this matter, reversing a

decision of the Circuit Court for Montgomery County,

Maryland. The Circuit Court previously held that

HCVP vouchers5 could not be regarded as a “source of

income” under the County‟s housing discrimination

law.6 The Court of Appeals‟ decision is officially

reported at 402 Md. 250, 936 A.2d 325, and

reproduced in the Appendix to Petitioner Glenmont

Hills Associates Privacy World at Glenmont Metro

5 “HCVP” vouchers refers to a provision of the federal

Housing and Community Development Act of 1974 (P.L. 93-

383), 42 U.S.C. §§ 1437 et seq. (LexisNexis 2008), which

provides a means for low income families to obtain rent

subsidies from the federal government without being

required to live in public housing projects. Essentially, a

landlord who voluntarily chooses to participate in this

program accepts rent from two (2) sources: the tenant and

the federal government, through local public housing

authorities (“PHAs”), which makes up the difference

between what the tenant can afford (pursuant to a schedule

adopted by the U.S. Department of Housing and Urban

Development, or “HUD”) and the rent charged for the unit

in question. The manner in which the voucher system

provided under HCVP operates is accurately described in

the Department of Housing & Urban Development‟s

Housing Choice Voucher Program Guidebook, which may be

found at:

http://www.hud.gov/offices/pih/programs/hcv/forms/guideboo

k.cfm (hereinafter, “HUD VOUCHER PROGRAM GUIDEBOOK”)

(last visited May 28, 2008). 6 Montgomery County (Maryland) Code, Chapter 27, Article I,

Section 27-12, which is reprinted in relevant part at

Appendix G, page 228a of the Petitioner‟s Petition for Writ

of Certiorari.

5

Center‟s (“Petitioner” or “Glenmont”) Petition for Writ

of Certiorari (“Writ”) at App. A, pp. 12a – 46a.

ARGUMENT

I.

In its opinion, the Court of Appeals of Maryland

correctly identified that there are three types of

federal preemption: 1) express, 2) preemption by

occupation, and 3) preemption by direct conflict. 402

Md. at 267. Federal law also supports the notion of

preemption by direct conflict.7 Geier v. American Honda Motor Co., Inc., 529 U.S. 861, 884-85, 120 S.Ct.

1913, 1927 (2000) (“. . .[C]onflict preemption is

different in that it turns on the identification of

„actual conflict,‟ and not on an express statement of

pre-emptive intent . . . While pre-emption

fundamentally is a question of congressional intent,

[the Supreme Court] traditionally distinguishes

between express and implied pre-emptive intent, and

treats conflict pre-emption as an instance of the

latter”). Although Congress did not include specific

preemption language in the federal housing statute

that it enacted,8 its policy declaration (codified as 42

7 Although the Maryland Court of Appeals uses the words

“direct conflict” and the U.S. Supreme Court uses the

terminology “actual conflict,” they are substantially

synonymous, and are treated as such in this brief. 8 The Geier Court also made clear that an agency‟s failure to

clearly express its intent to fully regulate a particular area

is not damaging to its preemption claim. 529 U.S. at 884

(“The failure of the Federal Register to address pre-emption

explicitly is thus not determinative.”) This also

demonstrates that even in the absence of a specific pre-

emption provision in the federal law a state statute that

6

U.S.C. § 1437) and its low income housing statute

(codified as 42 U.S.C. § 1437f) illustrate a specific

Congressional intent to encourage voluntary

participation in the housing program by private

citizens.9 The Montgomery County housing

discrimination statute, which mandates compulsory

participation in the federal program, creates a direct

conflict with the stated Congressional intent.

Pursuant to the doctrine of implied preemption, the

Montgomery County source of income provision (as it

applies to HCVP vouchers) is invalid.

The direct conflict in this case derives from the

landlords‟ statutorily-derived duty to participate in a

federally-voluntary program. The fact that the

federal statute states that landlord participation is

voluntary (see 42 U.S.C. § 1437f(d)(1)(A)), and that

the local statute makes participation compulsory,

creates this direct conflict. The local mandate is

conflicts with the stated purpose of the federal law may be

preempted by that federal law. 9 42 U.S.C. § 1437(a) discusses, almost entirely, the

responsibilities of the federal, state, and local governments

in housing underprivileged citizens. The only reference in

the statute to private landowners is found in 42 U.S.C. §

1437 (a)(4), where it states that “our Nation should promote

the goal of providing decent and affordable hosing for all

citizens through the efforts and encouragement of Federal,

State, and local governments, and by the independent and

collective actions of private citizens, organizations, and the

private sector.” (Emphasis added.) The use of the

conjunctive word and, to include private citizens,

organizations, and others in the private sector, makes clear

that the purpose of the low income housing statute‟s

responsibilities lie primarily with state governments, and

not private landowners. Montgomery County‟s mandate

that private landowners participate in this program is thus

plainly violative of this statutory mandate.

7

contradictory to the express public policy defined in

the federal statute, and thus is in direct conflict with

the federal statute.

Where a state or local statute is in direct conflict

with a federal statute, the local statute is impliedly

preempted by the federal statute. See Geier, supra.

The doctrine of “implied preemption” has the same

effect on the local statute as does express preemption;

it invalidates the local statute. The local statute at

bar here, because its text and implementation fly in

the face of the expressed federal policy declaration,

must be invalidated according to the doctrine of

implied preemption.

In its November 30, 2007 opinion, the Maryland

Court of Appeals‟ asserted that “there is nothing in

any of the relevant Federal statutes even to indicate,

much less establish, that voluntary participation by

landlords was an important Congressional objective.”

402 Md. at 269. However, Congress‟ policy statement

found at 42 U.S.C. § 1437(a), makes quite clear that

Congress intended for private landowners to

voluntarily supplement the Federal and state

government programs, not be compelled to participate

in them. The Court‟s assertion that there is no

established law that expresses Congress‟ intent to

make participation voluntary therefore is not

accurate. Amicus posits that the Court‟s holding on

preemption (which was entirely based on the belief

that there was no legislative intent to make the

HCVP program voluntary) was thus fundamentally

flawed, and is now ripe for consideration by this

Court.

The heretofore purely voluntary participation

of landlords in the HCVP program obligates them, as

a condition of participation, to a myriad of

8

bureaucratic, recordkeeping, and substantive

obligations. These include: (a) limitations (both in

point of time and substantively) on the ability of

landlords to terminate a tenancy for nonpayment of

rent; (b) the landlords‟ ability to allow HCVP

participants to engage in profit-making activity on the

premises (even though non-HCVP participants may

be restricted from doing so); (c) mandating that

landlords use a standard federally-approved Housing

Assistance Program (“HAP”) contract which the

landlord may not modify;10 (d) granting authority to

the public housing authority to terminate assistance

to a tenant, thereby effectively terminating the lease

without advance notice to the landlord; (e) mandating

that landlords satisfy federally administered and

enforced HUD quality standards, permitting frequent

inspections by the public housing authority (and

mandating such inspections annually);11 (f) a

requirement that landlords prove that they have not

charged rents for HCVP units at a different rate than

comparable units that are not subject to HCVP

tenancy agreements; (g) a requirement that HCVP-

covered units be accessible to the disabled, which

could require thousands of dollars in repairs and

upgrades to existing facilities; and, most notably (h) a

mandated limitation on a landlord‟s right to raise

10 The Housing Assistance Program form contract, an eleven-

page document that derives authority from 24 C.F.R. Part

982, must be used for HCVP participants, and may not be

modified. Housing Assistance Program Contract, Part B,

Section 2 (App. K, pp. 278a-296a of the Writ). 11 The HUD inspection guidelines are found at 24 C.F.R. §

982.401, which is attached as App. G, pp. 214a-224a of the

Writ.

9

rents based upon a determination of “reasonableness”

by the public housing agency. 402 Md. at 276, 936

A.2d at 340; see also HUD VOUCHER PROGRAM

GUIDEBOOK, n.2 supra.12 Additionally, landlords are

granted only nominal notice of the PHA‟s intent to

change payment benefits to an HCVP recipient. This

significantly impacts tenants‟ ability to pay future

rents, and compromises landlords‟ ability to rely on

full, timely rental payments each month.

By compelling Montgomery County, Maryland

landlords to accept HCVP participants who present

vouchers under the HCVP program (through the risk

of being deemed liable for housing discrimination

based upon “source of income”) the Montgomery

County government has made mandatory that which

Congress intended to remain purely voluntary. This

practice has been adopted in no fewer than at least

twelve other states and eighteen other localities, and

risks spreading to even more jurisdictions if this

Court does not definitively put a halt to it.13

12 At least one court determined, in dicta, that “it seems

questionable . . . to allow a state to make a voluntary federal

program mandatory.” Knapp v. Eagle Property Management Corp., 54 F.3d. 1272, 1282 (7th Cir. 1995). In

Knapp, the Seventh Circuit discussed federal preemption in

the context of HCVP vouchers, much like the statute at

issue here. 13 California, Connecticut, Maine, Massachusetts, Minnesota,

New Jersey, North Dakota, Oklahoma, Oregon, Utah,

Vermont and Massachusetts have all adopted similar

statutes. Additionally the cities of Costa Matera, California,

East Palo Alto, California, Los Angeles, California, San

Francisco, California, Washington, D.C., Chicago, Illinois,

Naperville, Illinois, Urbana, Illinois, Philadelphia,

Pennsylvania, Grand Rapids, Michigan, Kentwood,

Michigan, Minneapolis, Minnesota, St. Paul, Minnesota, St. Louis, Missouri, Hamburg, New York, and Seattle

10

Congress simply did not intend this purely

voluntary program to be mandated by a patchwork of

state and local government legislation, either by

characterizing it as an “anti-discrimination” law or

otherwise. That the federal HCVP program is wholly

voluntary, subjecting only those landlords willing to

opt into its regulatory provisions to its terms, is fully

demonstrative of Congress‟ intent to encourage, but

not force, landlords to expand the stock of housing

units available to low income families. Because

Congress did not intend for the HCVP to be

mandatory, Montgomery County‟s attempt to

mandate landlord compliance with the HCVP is

preempted by federal law, thus constituting this local

law violative of the Supremacy Clause of the U.S.

Constitution. Art. I, Cl. 2.

In practice, if this Court allowed the lower

Court‟s decision to stand, landlords will be

encouraged to raise rents prior to occupancy for the

sole purpose of avoiding participation in the HCVP

program.14 This would make housing even less

Washington have adopted similar legislation. Finally, two

counties (Howard County, Maryland and King County,

Washington) have enacted similar legislation. Brief of Amici Curiae Maryland Disability Law Center, et al. to

Maryland Court of Appeals, at 28 n. 52. That so many state

and local jurisdictions have crafted such legislation makes

this case ripe for judicial review, in order to avoid further

patchwork local legislation that conflicts with the already-

established federal statutes and accompanying regulations. 14 Prior to occupancy, the landlord and tenant negotiate the

possible rent. 24 C.F.R. § 982.506. After negotiation, the

PHA determines whether the agreed-upon rent is

reasonable. 24 C.F.R. § 982.507(a)(1). If the PHA

determines that the proposed rent is reasonable, then the

tenant and PHA execute a lease. 24 C.F.R. § 982.507(a)(1).

After executing the lease, the PHA may, at the discretion of

11

affordable for more families who would otherwise live

in rental units that are not subject to by the Housing

Choice Voucher Program.15 Additionally, by

mandating HCVP participation, landlords lose their

right to determine who will occupy their rental

property. Under the federal law, landlords are

ostensibly permitted to choose whether to lease to a

particular HCVP participant. 42 U.S.C. § 1437.

There are many legitimate reasons why a landlord

may choose not to rent to a particular tenant that

have nothing to do with source of income; as the

property owner, the landlord has a right to establish

qualification guidelines that comply with current fair

housing laws in determining who may occupy his

property. However, the Montgomery County statute

blurs this line and effectively invalidates this

property right. Montgomery County landlords who

HUD, perform periodic “rent audits” to determine whether

the rent is reasonable. 24 C.F.R. 982.507(a)(2). Thus, after

occupancy, HUD (acting through the PHA) can unilaterally

change the definition of reasonable rent, further reducing a

landlord‟s financial return. Landlords who voluntarily

subject themselves to these standards are willing to accept

this risk. Mandating that landlords subject themselves to

this risk (and shoulder the burden of all low-income housing

in Montgomery County) was not the result that Congress

sought to create. 15 The Maryland Court of Appeals acknowledged this perverse

result of compelling landlords to participate in a voluntary

federal program when it observed that “a landlord is free to

set the rent for its apartments high enough to make the

apartment unavailable to HCVP participants tenants

because of the HCVP income and reasonable rent

limitations.” 402 Md. at 266, 936 A.2d at 334, n.7. Surely,

this was not the intention either of Congress or even the

Montgomery County Council when it enacted its ill-advised

legislation.

12

reject program participants will find themselves

defending anti-discrimination suits. So the “choice” is

truly a Hobson‟s Choice for landlords; either accept

HCVP participants as tenants or risk costly civil

rights litigation. Small landlords in Montgomery

County, stripped of the right to choose tenants based

on legitimate criteria, will be forced to allow possible

HCVP participants to occupy their property at the

behest of the Montgomery County PHA with the

imposition of non-negotiable, burdensome, and costly

HCVP contract compliance requirements. This

unofficial secondary mandate is an unfortunate side

effect of the original Montgomery County mandate to

accept HCVP program participants as tenants, and

will certainly discourage private landowners from

renting property at all.

II.

The lower Court‟s insistence that landlords in

Montgomery County run afoul of its anti-

discrimination law by refusing to participate in the

voluntary HCVP program creates a restriction on the

use of real property to unwilling landlords that

effectively amounts to a regulatory “taking” without

due process, violative of the Fifth and Fourteenth

Amendments of the United States Constitution.

Without conducting any analysis, the Court below

concluded that the State‟s regulation of property via

the Montgomery law was a “reasonable” exercise of its

police power.16 Yet dictating landlords‟ selection of

16 In Davis v. Department of Revenue of Kentucky, ___ S.Ct.

___, 2008 WL 2078187 (2008), which was just decided by

this Court on May 19, 2008, Justice Kennedy in dissent

observed that the concept of a state‟s “police power” was

13

tenants by forcing them to accept individuals and

families who, by virtue of their participation in the

Housing Choice Voucher Program requires landlords

to undertake a host of obligations and restrictions

which they would otherwise chose to forego – and

which will undoubtedly increase their cost of

maintaining rental units by virtue of compliance with,

inter alia, detailed “quality standards” (see Appendix

A, pages 214a – 227a of the Writ of Certiorari) –

effectively reduces the owners‟ constitutional property

rights. Additionally, a landlord risks significant

exposure to civil rights litigation when multiple

applicants apply for a single residence, and one of

those applicants is an HCVP participant.

Such unwanted restrictions and maintenance

obligations forced upon unwilling landlords constitute

regulatory takings, and thus violate the “Takings

Clause” of the Fifth Amendment. Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 125 S.Ct. 2074 (2005);

Penn Central Transportation Company v. City of New York, 438 U.S. 104, 98 S.Ct. 2646 (1978) (holding that

regulatory takings are tantamount to an exercise of

eminent domain, and thus subject to due process

requirements guaranteed by the Fifth Amendment).

“long abandoned as a mere tautology . . . the Court ha[s]

ceased to view the concept as saying anything instructive.

A law may contravene a provision of the Constitution even if

enacted for a beneficial purpose.” Id. at *21 (Kennedy, J.,

dissenting). Justice Souter‟s majority opinion in Davis

continues to recognize the State‟s right to exercise such

powers, but insisted that in doing so, it ought to be

“supporting a traditional public function.” Id., at * 7, n.9.

Amicus in this case cannot discern what “traditional public

function” has been served by a local law that would force its

members to participate in a voluntary federal housing

voucher program.

14

The Fifth Amendment Takings Clause provides that

private property shall not be taken for public use

without just compensation. U.S. Const., Amend. 5;

see also Lingle v. Chevron U.S.A., Inc., 544 U.S. at

536. Impermissible “takings” may include a

government‟s direct appropriation of private property

for governmental use, Id. at 537, citing United States v. Pewee Coal Co., 341 U.S. 114, 71 S.Ct. 670 (1951),

or governmental regulation of private property “that

is so onerous that its effect is tantamount to a direct

appropriation or ouster.” Lingle, 544 U.S. at 537; see also Pennsylvania Coal Co. v. Mahon, 260 U.S. 393,

415, 43 S.Ct. 158 (1922) (“[W]hile property may be

regulated to a certain extent, if regulation goes too far

it will be recognized as a taking.”) By compelling

landlords to participate in the federally-voluntary

HCVP housing assistance program, the regulation at

issue in this case imposes onerous regulations upon

landlords. Amicus submits that burden to those

landlords‟ property rights constitutes a regulatory

taking, and that the Montgomery County Code

provision is unconstitutional even in light of the fact

that the landlord receives a limited monetary benefit

from the government by virtue of such participation.17

Montgomery County Code Chapter 27, Article I,

Section 27-12 provides, in relevant part:

17 Allowances to HCVP participants area subject to federal

budget considerations. 42 U.S.C. §1439(d); see also 24

C.F.R §982.l01. Thus, HCVP payments to landlords are only

available to the extent that federal funding permits. When

federal funding evaporates in a local Market, the local PHA

may unilaterally terminate the lease. 24 C.F.R. § 982.454.

When this happens, landlords lose significant income that

they would have earned if not compelled to rent a HCVP

participant, and landlords have no recourse whatsoever.

15

(a) A person must not, because of . . . source of

income . . .

(1) Refuse, or refuse to negotiate, to sell,

broker, appraise, lease, sublease, rent,

assign, or otherwise transfer the title,

leasehold, or other interest in any

housing;

(2) Represent that housing is not available

for inspection, sale, lease, sublease,

rental, assignment, or other transfer

when it is available;

(3) Otherwise deny or withhold any housing

from any person;

(4) Include in the terms, conditions, or

privileges of any sale, lease, sublease,

rental, assignment, or other transfer or

any housing, any clause, condition, or

restriction discriminating against any

person in the use or occupancy of that

housing;

(5) Discriminate in the furnishing of any

facilities, repairs, improvements, or

services, or in the terms, conditions,

privileges, or tenure of occupancy of any

person . . . (App. G, p. 228a, of the Writ.)

The Montgomery County Code (“MCC”) further

defines a “source of income” in § 27-6 as “any lawful

source of money, paid directly or indirectly to a renter

or buyer of housing, including income from . . . any

government or private assistance, grant, or loan

program.” MCC § 27-6. Taking these two definitions

as a whole, the Maryland Court of Appeals held that

16

“source of income” under the Montgomery County

Code includes HCVP vouchers. MCC ch. 27 § 6, 12;

see also Montgomery County v. Glenmont Hills Associates Privacy World at Glenmont Metro Centre,

402 Md. 250, 261 (2007). The primary factors for

determining whether a government agency‟s action

constitutes a “taking” under the Fifth Amendment

are: 1) the economic impact on the claimant, 2) the

extent to which the regulation has interfered with

distinct investment-backed expectations, and 3) the

character of the governmental action. Lingle, 544

U.S. at 538-39. The ordinance at issue here fails all

three elements of this test, and must therefore be held

violative of the Fifth Amendment‟s Takings Clause.

Montgomery County‟s requirement is

characteristic of a taking under the Fifth

Amendment. As a condition of accepting HCVP

tenancies, landlords must endure property

inspections. 24 C.F.R. § 982.305. The requirements,

outlined in 24 C.F.R. § 982.401, include

comprehensive housing quality standards (“HQS”)

that a landlord must meet prior to a tenant‟s

occupancy and upon each annual lease extension.18

18 The housing quality standards inspection requires

inspection of the following elements of the proposed

dwelling: 1) sanitary facilities, 2) food preparation and

refuse disposal, 3) space and security, 4) thermal

environment, 5) illumination and electricity, 6) structure

and materials, 7) interior air quality, 8) water supply, 9)

lead-based paint, 10) access, 11) site and neighborhood, 12)

sanitary condition, and 13) smoke detectors. The

Department of Housing and Urban Development (“HUD”),

which is responsible for implementing the inspections, has

the authority to grant certain limited variations, due to

local housing codes, other codes adopted by the PHA, or

local climatic or geographic conditions. 24 C.F.R. §

17

In practice, initial property inspections take several

weeks (if not months) to complete under the current

(voluntary) system.19 Montgomery County‟s wish to

make all landlords comply with the voluntary federal

housing choice voucher program will succeed only in

delaying the availability date of rental properties in

the county. This will have a diametrically different

impact on both landlords and tenants than the federal

law ever imagined. This is but one example of how

the local statute conflicts with the stated legislative

intent in 42 U.S.C. § 1437.

Landlords‟ property rights are significantly

affected by the MCC. Landlords must endure

inspections, accept HCVP participants as tenants,

and (during the tenancy) run the risk of the PHA

losing the funding necessary to support the program

(and thus immediately terminating the lease). In

982.401(a)(4)(ii). However, these variations may only be

approved by HUD if they meet or exceed performance

requirements, or if those variations “significantly expand

affordable housing opportunities for families assisted under

the program.” 24 C.F.R. § 982.401(a)(4)(iii). In short, the

variations available to landlords (granting leniency with

respect to the occupancy requirements outlined in 24 C.F.R.

§ 982.401) are not widely available, and most landlords will

be required to comply with the inspection requirements

outlined in the regulation. 19 Where a landlord fails an initial inspection, that landlord

must make necessary improvements and await a return

visit from a Montgomery County housing official prior to

offering the property for rent. This is an additional

administrative hoop through which landlords must jump in

order to comply with the Montgomery County requirements.

If landlords were not required to endure this additional

administrative hoop, landlords of smaller properties could

freely rent to the tenants of their choice without risk of

running afoul of a voluntary federal law.

18

total, landlords‟ property rights are substantially

diminished by this compulsory program, without a

guarantee of just compensation (and a reduced profit

margin, brought on by the landlord‟s increased

maintenance costs). This, by its very nature,

constitutes a Fifth Amendment taking.

By making participation in the HCVP mandatory,

the County also makes mandatory the federal

qualifying requirements for all landlords (even those

who previously chose not to participate in the

program). The heightened tenancy requirement and

the “reasonable rent” requirement will diminish the

profit margin available to Montgomery County

landlords. The economic impact of this statutory

requirement on landlords in Montgomery County,

combined with the diminished right to discern proper

use and occupancy of their rental property, is

sufficiently onerous to constitute an unconstitutional

regulatory taking under the Fifth Amendment. The

character of the governmental action (using private

property for public use without guaranteeing just

compensation for the inconvenience) is by definition, a

taking. Montgomery County‟s legislation thus fails

all three aspects of the Lingle test and it must be

overturned.

Montgomery County – in the name of providing

affordable housing to all – has succeeded only in

making that same housing less available and less

affordable. Landlords, forced to make substantial

structural changes to their property, will be forced to

finance those changes with higher rental rates. The

federal government and the local PHA, who will pay

the majority of the increased rental rate, will be

forced to dig deeper into already strained public

housing funds in order to pay the increased rental

19

rates.20 Tenants all over Montgomery County – still

responsible for 30% to 40% of the rental rate – will

also suffer increases in their rent. The Montgomery

County plan, thus, will not only not serve its

ostensibly noble goal, it will certainly counteract it,

causing rental rates to skyrocket in Montgomery

County and likely causing widespread flight to

outlying counties, both for landlords and tenants.

This likely end certainly makes clear why Congress

stated specifically that participation in the Housing

Choice Voucher Program was entirely voluntary for

landlords; those landlords are uniquely able to assess

whether their participation in the program is worth

the associated requirements. Montgomery County‟s

nonsensical mandate will not serve this intended

Congressional goal.

III.

NARPM‟s members will be dramatically impacted

if MCC § 27-6 stands. Landlords, many of whom own

buildings with only a few units, will be forced to

spend more money on repairs, remodeling, and

maintenance (both before and during occupancy) in

order to keep their HUD certification. This will result

in inflated rent prices in Montgomery County.

Landlords may not choose their tenants; those

landlords who choose not to rent to particular HCVP

tenants will have to fight the presumption that

decisions to reject HCVP participants are 20 Alternatively, government agencies will be forced to spend

their already-limited funds much more quickly, thus

causing more unilateral terminations of rental agreements

with private landowners.

20

discriminatory and violative of the Montgomery

County law. Families trying to earn additional

income by renting their surplus property will lack the

incentive to do so; this statute could spur a

widespread attempt to sell rental property in

Montgomery County. Small landlords will do

whatever is necessary to avoid the Hobson‟s Choice

provided to them by the County Code.

Unfortunately, those who wish to remain

landlords (and many who already provide low-income

housing) will be required by law to update and

maintain their rental facilities according to guidelines

found in the Code of Federal Regulations or suffer the

consequences of losing the ability to rent the property

altogether. If a landlord does not have two working

outlets in a given room, then that landlord may not

rent the property. If a landlord does not have

sufficient counter space (as adjudged by a

Montgomery County inspector), that landlord may not

rent the property. If the property is not “reasonably

free from disturbing noises” (as adjudged by a

Montgomery County inspector, even if the property is

located in a neighborhood surrounded by other

inhabitants), then the landlord may not rent the

property. If the streets surrounding the property

have “excessive vehicular traffic,” (as adjudged by a

Montgomery County inspector), then the landlord

may not rent the property. If the property does not

have a window in the living room, then the landlord

may not rent the property.21 Any of these criteria

could easily make a HCVP participating property

21 This is but a small sampling of the inspection requirements

found in 24 C.F.R § 982.401.

21

untenable and unaffordable to own and to manage.

Surely, there are properties in Montgomery County

that will not meet these exacting requirements, and it

is even more likely that properties owned by small

landlords will fall short of the strictures prescribed for

participants in the HCVP program.

The Court is well aware of the growing housing

crisis marked by an alarming rise in the number of

home foreclosures occurring in every part of the

country.22 As cash-strapped homeowners seek to

keep their homes, many have turned to renting them

to others. The decision of the Maryland Court of

Appeals in this case will only exacerbate this problem

by removing from the potential rental market

hundreds (if not thousands) of private homes whose

owners could no longer quickly turn to the rental

market to generate the cash needed to fend off

foreclosure of their homes. Instead, potential

landlords of single family dwellings would have to

first undergo the cumbersome pre-rental and lease

renewal inspection and repair process prescribed by

HUD regulations for HCVP-approved housing, a

process that could take weeks or even months during

which time their home mortgage debt would remain

unpaid, thereby furthering the likelihood that their

home would fall into foreclosure and fuel property

devaluations for the neighboring properties as well.

Many NARPM members provide housing for

tenants who might not otherwise be able to afford to

live in Montgomery County. NARPM members –

22 See, e.g., “Renters Can‟t Escape Housing Foreclosure

Crisis,” found at

http://www.usatoday.com/money/economy/housing/2008-4-

21-rent-rising-eviction_N.htm (last visited May 29, 2008).

22

many of whom manage single family rental properties

– will not be able to do that job effectively, given the

nature of the Montgomery County Code. Landlords

with an altruistic intent will have that intent

squashed under a myriad of bureaucratic rules and

regulations. The MCC, drafted in an effort to help

provide low income housing to those who most need it,

will have an opposite effect, as it was certainly not Congress‟ intent to create arbitrary rent inflation in

rental markets across the nation. In an effort to

sustain Congress‟ promise to provide affordable

housing to the downtrodden, amicus presents this

impassioned appeal to this Court.

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

Leslie R. Stellman

Counsel of Record Shani K. Whisonant

HODES, PESSIN &

KATZ, P.A.

901 Dulaney Valley Road,

Suite 400

Towson, Maryland 21204

(410) 938-8800

Counsel for Amicus National Association of Residential Property Managers